MinFin raises USD 59 mln placing 6M local Eurobonds

Ukraine’s Finance Ministry raised USD 59.1 mln from
the sale of 6M USD-denominated bonds and UAH 959.3 mln from 3M UAH-denominated
bonds (a total of UAH 2.6 bln in the equivalent) at an unscheduled auction held
on Aug. 9 after raising the equivalent of UAH 10.0 bln at its Aug. 7 auction.
As in the previous week, the
government held two auctions this week instead of the typical one weekly
auction as it sought to raise more funds.

Thursday’s results indicated that demand for new
government debt was relatively weak. MinFin satisfied five out of six bids for
6M local Eurobonds at 5.95% (vs. 5.89% on Aug. 7). MinFin rejected two bids for
3M local Eurobonds. Three-month UAH-denominated bonds were sold to two bidders
at 18.00%.

Evgeniya Akhtyrko: The main
goal of this auction was the placement of USD-denominated bonds. In line with
our expectations, the government is trying to to raise more foreign currency
with the sale of local Eurobonds in order to offset the losses of gross international reserves
during August amid high repayments on FCY-denominated debt. However, Thursday’s
auction results indicate that the local markets don’t have much foreign
currency to provide the government with.

At the next auction scheduled for Aug. 14, the
government will make another attempt to collect some foreign currency on the
domestic market by offering four types of local Eurobonds with maturity ranging
from three months to two years. We expect short-term bonds to be in higher
demand.  Higher interest rates are possible.